✨ Financial Statements Notes
Notes to the financial statements
16 Trust funds (continued)
Core Real Capital Base Reserve
The Core Real Capital Base Reserve arose when monies were received on the sale of the Trust Bank Canterbury to Westpac.
Capital Base Reserve
The Capital Base Reserve provides a fund to reflect the effects of annual inflation on the Core Real Capital Base Reserve, using CPI to calculate the amount.
Accumulated Income Reserve
The Accumulated Income Reserve reflects the accumulated profits from earlier periods.
in New Zealand Dollars ($000's)
17 Trade and other payables
| Group | ||
|---|---|---|
| 2009 | 2008 | |
| Other trade payables | 329 | 321 |
| Non-trade payables and accrued expenses | 9,133 | 2,186 |
| 9,462 | 2,507 |
18 Financial instruments
Exposure to credit, interest rate, foreign currency, equity price and liquidity risks arises in the normal course of the Group's business. The Group's risk management policies and procedures for financial instruments are formally documented and approved by the Trustees in the Group's Statement of Investment Policies and Objectives ("SIPO").
Credit risk
The Group's SIPO stipulates value ranges that may be held in cash, New Zealand bonds, international bonds, emerging market bonds and property. Within each of these investment sub-groups there are maximum limits that can be invested within one financial institution. This diversified investment strategy reduces the credit risk exposure of the Group.
The Group only makes loans to entities that are well established and have the ability to demonstrate strong cashflows.
The SIPO states minimum credit ratings of the majority of investments that have to be achieved.
Liquidity risk
Liquidity risk represents the Group's ability to meet its contractual obligations. The Group evaluates its liquidity measurements on an ongoing basis. In general, the Group generates sufficient cash flows from its activities to meet its obligations arising from its financial liabilities.
Market risk
Market risk is the risk that changes in market prices, such as interest rates or equity prices, will affect the Group's profit or valuation of net assets. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
The risk is mitigated by the policies and procedures outlined in the Group's SIPO. These include diversification of the investment portfolio and prudent investment strategies.
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NZ Gazette 2009, No 112
✨ LLM interpretation of page content
🏢
Notes to the financial statements of The Canterbury Community Trust
(continued from previous page)
🏢 State Enterprises & Insurance6 July 2009
Trust Funds, Capital Base Reserve, Accumulated Income Reserve, Financial Instruments, Credit Risk, Liquidity Risk, Market Risk